Living Trusts

Fixed Annuities – Provide a fixed interest rate usually for a set number of years. Interest is tax deferred. Some provide a bonus in the first year. Surrender charge if cashed in before the set number of years.

Equity Index Annuities – Allows you to participate in the stock market usually through an index such as the S&P 500. If the market goes down your value will not go down. However, your gains if the stock market goes up are limited. Usually with a cap or average of returns. Guaranteed minimum returns and indexed-linked gains vary depending on a specific equity indexed annuity's calculation method. Guaranteed returns are only as good as the insurance company that gives it. If you surrender your equity index annuity early, you may have to pay a significant surrender charge and a 10% tax penalty that will reduce or eliminate any return.

Immediate Annuities – You give a lump sum to an insurance company and they guarantee an income for life. This is similar to creating your own pension. If you die before a certain number of years, the income will go to your beneficiaries for the remainder of a certain period usually not past 20 years. This depends on the options you choose. Your spouse can also be protected for life. If you live past that certain time period, when you die your children or grandchildren will not receive anything. You also give up the use of your asset. This is why this type of annuity can provide a higher income stream for life than many other options.

Long-Term Care Insurance – Insurance that provides a daily benefit to help pay for home health care, nursing home care, or assisted living. Medicare does NOT provide for long term care. Medicaid will provide only after taking your assets. If you are married, Medicaid allows you to leave certain assets to your spouse.

Living Trust – Allows you to avoid probate on assets such as your home. There are assets that avoid probate without a living trust such as annuities, IRAs, 401(k)s, life insurance proceeds. This is basic information. Talk to an attorney for specific advice on living trusts.

Social Security – When should you take social security? If you take it sooner than later you will receive a smaller payment. However, if you wait you give up income for those years. There is a break even that will provide more information pertaining to your specific situation. This will allow you to determine when you should take social security. Please consult your financial advisor for information specific to your situation.

Pension Options – At retirement you may have several options to choose from. Each plan is different than the next, however there are basic options.

• Lump sum
• Payment guaranteed until death, spouse does not continue benefit
• Payment guaranteed until death, spouse receives 100% benefit
• Payment guaranteed until death, spouse receives 67% benefit
• Payment guaranteed until death, spouse receives 50% benefit
  
  The lower percentage your spouse receives, the higher your payment will be.
  Also when both spouses die there usually is no benefit for children or grandchildren.
  There are ways to continue payments to children and grandchildren for a certain period of time.

*This is basic information on all topics. Contact us for more detailed information. Many of the topics include fees or costs. These costs can vary from attorney fees on living trusts, long-term care insurance premiums, annuity fees. These all vary depending on the attorney or insurance company.